BB&T says Alabama deposits up one year after Colonial debacle

It has been one year since BB&T Corp. entered the Alabama banking market, and the company says deposits have risen 10 percent since the takeover of Montgomery's Colonial Bank in a government assisted transaction.

BB&T took control of 102 Alabama branches and another 240 nationwide last August after Colonial was seized by regulators. Loans made to borrowers who couldn't repay them threatened to sink Colonial. BB&T was brought in to take over the branches and deposits.

Since then, Alabama has been a bright spot for Winston-Salem, N.C.-based BB&T.

"People have been looking for new options," said Donta Wilson, BB&T's Alabama state president. "The four largest banks based in Alabama have all been through tremendous change in recent years."

None more than Colonial. Holding company Colonial BancGroup filed for bankruptcy protection amid the seizure, listing assets of $45 million and debts of $380 million. Shareholders, including founder and Chief Executive Bobby Lowder, were wiped out.

This year, federal investigators said in an indictment of a former Colonial lending partner that the Montgomery bank was part of a $1.9 billion fraud that attempted to swindle the Troubled Assets Relief Program.

Colonial also held worthless loans on its books that were accounted for as being paid as agreed, inflating its balance sheet, investigators said. The company is under criminal investigation by the Justice Department and a civil probe by the Securities and Exchange Commission.

Those days are far behind, according to former Colonial employees retained by BB&T. On Friday, branches across the metro area held office receptions and tailgating parties for customers to celebrate the anniversary.

"We have been getting new customers every day," said Brian DeSarbo, manager of BB&T's Vestavia branch, setting out platters of chicken fingers and cookies iced with the BB&T logo.

Outside, an inflatable bouncy castle was set up in the parking lot, and customers stopped for coffee and a chance to play a "spin-the-wheel" game for prizes such as pens and key chains.

"Colonial didn't do any of this kind of stuff," Wilson said, after breezing into the branch and greeting the employees by name. "People tell me they would have to call Montgomery to get permission to send a thank-you letter to a client."

The flesh-pressing and boardwalk games might sound like county fair hokum to some, but BB&T employees say it is true to the company's rural roots.

The company started out more than 100 years ago as a farm lender, and has been buying up rivals ever since. Along the way, it developed a uniform code of conduct for all employees, a combination of barnyard common sense and classical free-market economics. Anyone who doesn't buy in 100 percent doesn't last long, company executives freely admit.

"What we have recaptured here is enthusiasm," Wilson said. "People here had been beat up for about 18 straight months. They were turning their name tags around when they went out to lunch; that doesn't happen anymore."